Opinion
March 29, 2000.
Appeal from Judgment of Supreme Court, Onondaga County, Stone, J. — Matrimonial.
PRESENT: PIGOTT, JR., P. J., WISNER, SCUDDER AND LAWTON, JJ.
Judgment unanimously modified on the law and as modified affirmed without costs and matter remitted to Supreme Court for further proceedings in accordance with the following Memorandum: On appeal from a judgment of divorce, plaintiff contends that Supreme Court erred in awarding 70% of the majority of the marital assets to defendant. "In distributing the marital assets, the court has great flexibility and discretion to fashion an equitable award" ( Lester v. Lester, 237 A.D.2d 872, 874). Defendant's business, which was started by defendant's grandfather and is made up of several closely held corporations, comprises much of the marital estate. In order to maintain the viability of the businesses, defendant has assumed tremendous financial risk in the form of personal guarantees. The court properly considered defendant's liabilities and potential liabilities when it distributed the assets connected to the business. However, with respect to the residences of the parties in the United States and the Netherlands, the Rose Hill bank account, the Sand Beach escrow account and defendant's IRA, we conclude that the court erred in distributing 70% of those assets to defendant. Because both parties contributed to building the marital assets in this long-term marriage and the court "found no factors that justify an unequal distributive award, [those] assets should be distributed equally" ( Baudisch v. Baudisch, 233 A.D.2d 834). We do not disturb the court's determination of credits to defendant.
The court erred in determining an after-tax value for the water supply agreement between Burrows Water Works, a subchapter S corporation, and Burrows Paper Corporation. There appears to be no legal support for defendant's contention that a subchapter S corporation should be valued differently from a subchapter C corporation. "It is well settled that the capitalization of earnings method is appropriate in valuing a closely held corporation" ( Stolow v. Stolow, 149 A.D.2d 683, 686, mot to resettle granted 152 A.D.2d 559; see also, Drohan v. Drohan, 193 A.D.2d 1070; Siegel v. Siegel, 132 A.D.2d 247, 252, appeal dismissed 71 N.Y.2d 1021, lv denied 74 N.Y.2d 602). We therefore remit this matter to Supreme Court to determine the value of the water supply agreement, utilizing the discount rate of 25%, the rate agreed upon by the experts prior to the court's expert's consideration of tax effects.
The court erred in failing to award plaintiff prejudgment interest on those assets that were valued as of the time of the commencement of the action ( see, Selinger v. Selinger, 232 A.D.2d 471, 473, lv dismissed 89 N.Y.2d 981, 90 N.Y.2d 842, rearg denied 90 N.Y.2d 937; Povosky v. Povosky, 124 A.D.2d 1068, 1070; cf., Schanback v. Schanback, 159 A.D.2d 498, 500, lv denied 76 N.Y.2d 703). Therefore, upon remittal, the court must also determine the appropriate rate of prejudgment interest in the exercise of its discretion ( see, CPLR 5001 [a]; Selinger v. Selinger, supra, appeal after remittal 250 A.D.2d 752, 753, appeal dismissed in part and denied in part 92 N.Y.2d 891).
There is no indication that the temporary order of support was a final determination of the issue of child support ( cf., Hart v. Hart, 227 A.D.2d 698, 701), and thus we conclude that the court erred in failing to make the child support award retroactive to the date of the application therefor ( see, Lester v. Lester, supra, at 873; Koczaja v. Koczaja, 195 A.D.2d 693, 693-694, lv denied 83 N.Y.2d 756). Upon remittal, the court must further determine the amount of child support owed to plaintiff, with appropriate credits to defendant for payments made pursuant to the temporary order dated January 19, 1994 ( see, Lester v. Lester, supra, at 873 ).
Finally, we have considered the remaining issues raised by plaintiff and conclude that the court's determinations with respect to those issues are supported by the record. We therefore modify the judgment by vacating the fourth and seventh decretal paragraphs, and we remit the matter to Supreme Court for further proceedings as set forth herein.